* Spot gold strikes record high at $1,512.50/oz
* Spot silver hits 31-year high at $46.69/oz
* RSI on spot silver at 24-year high
* Gold seen to consolidate around $1,500 level next week
(Updates prices; writes through)
By Rujun Shen
SINGAPORE, April 22 (Reuters) - Spot gold surged to a
lifetime high on Friday in thin holiday trade, hitting a record
for a sixth consecutive session on a weak dollar and factors
ranging from geopolitical uncertainty to inflation concerns.
Silver also raced to its loftiest in 31 years, notching the
milestone for a seventh straight day and outstripping gold's
weekly gains by a huge margin.
The ongoing euro zone sovereign debt crisis, unrest in the
Middle East and North Africa, rising global inflation, and most
recently worries over the fiscal stability of the United States
have fueled the record-breaking rally in these precious metals.
Spot gold rose to an record of $1,512.50 an ounce,
before easing to $1,507.69 by 0853 GMT, on track for a weekly
gain of 1.5 percent -- its sixth consecutive week of gains.
Spot silver hit $46.69 an ounce, its highest since
1980, on course for a weekly rise of 8.4 percent, its biggest
weekly increase in two months.
Silver has gained 51 percent so far this year, and gold 6
percent. This compares with a corresponding 1 percent rise in
the London Metal Exchange price of copper, the bellwether of the
industrial metals complex.
Supporting precious metals, the dollar was
languishing near a three-year low against a basket of
currencies, and could take a run at the all-time low hit in
2008, pressured by record low interest rates and the crushing
weight of the U.S. budget deficit.
So long as the overall environment stays supportive and the
dollar remains weak, gold is expected to retain its strength.
Price of bullion is seen to rise to $1,700 an ounce by 2015,
analysts polled by Reuters said in a poll. []
However, a correction might be on the horizon after the
recent rapid ascent, traders and analysts said.
"Gold is likely to consolidate around the $1,500-level next
week," said Li Ning, an analyst at Shanghai CIFCO Futures. "The
angle of the recent rally is very sharp, and we are bound to see
some correction in the near term."
MORE STEAM TO RUN ON?
Spot gold has rallied more than $50, or 4 percent, in the
past eight sessions. The Relative Strength Index, or RSI, rose
to nearly 75, a level unseen since October last year, suggesting
the market has been heavily overbought.
The RSI on spot silver climbed close to near 89, its highest
since April 1987.
The gold market may have topped out, and now is the time to
sell while there are still people willing to buy, said Barry
Schwartz, vice president and portfolio manager at Toronto-based
wealth manager Baskin Financial Services.[]
However, Shanghai CIFCO's Li said gold has more steam to run
on and expected prices to peak at $1,550 by the end of the
second quarter, buoyed by the Middle East unrest, sovereign debt
concerns on both sides of the Atlantic and inflation worries.
The Shanghai Gold Exchange has started a trial for
over-the-counter trading, providing a convenient tool for
institutional clients to trade large quantities of gold, to
catch up with exploding investment demand in China.
[]
Holdings in the physically backed exchange-traded precious
metals funds dipped ahead of the long Easter weekend. SPDR Gold
Trust , the world's biggest gold ETF, saw holdings dip 0.6
tonnes to 1,229.643 tonnes.
Financial markets in Singapore and Hong Kong are closed on
Friday for a public holiday, and Hong Kong will remain closed on
Monday.
Precious metals prices 0853 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1507.69 4.95 +0.33 6.22
Spot Silver 46.62 0.06 +0.13 51.07
Spot Platinum 1822.49 11.69 +0.65 3.11
Spot Palladium 763.00 -2.48 -0.32 -4.57
TOCOM Gold 3984.00 2.00 +0.05 6.84 622
TOCOM Platinum 4840.00 12.00 +0.25 3.07 355
TOCOM Silver 122.40 -0.50 -0.41 51.11 151
TOCOM Palladium 2026.00 -3.00 -0.15 -3.39 6
COMEX GOLD JUN1 1503.80 4.90 +0.33 5.80 112875
COMEX SILVER MAY1 46.06 1.60 +3.59 48.87 134963
Euro/Dollar 1.4565
Dollar/Yen 81.93
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Editing by Himani Sarkar)
